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Tuesday, May 22, 2007

Macy's State Street business really, really bad

Macy's has admitted that Chicagoans, who were deeply PO'd by the decision to drop the Marshall Field's name, are staying away in droves from the venerable State Street location.

At a press conference after its annual meeting here Friday, Federated's chief financial officer, Karen Hoguet, said former Field's stores are performing no worse or better than the roughly 400 regional department stores Federated acquired from St. Louis-based May Department Stores Co. in 2005 and converted to Macy's.

Chairman and Chief Executive Terry Lundgren was quick to interject that operating a Midwest flagship in Chicago remains core to Macy's strategy.

"We're very committed to that store," said Lundgren, noting that rival Carson Pirie Scott a few blocks south closed its flagship store earlier this year. New owner Bon-Ton Stores decided the giant emporium was too costly to operate.

Overall, it looks like Macy's (the name change from Federated was finally made official yesterday) is not doing particularly well with the transition:

On Wednesday Lundgren characterized the former May stores' sales performance as "disappointing," as Federated missed its first-quarter sales target and earned less than Wall Street had expected.

Analysts estimate the sales drop at former May stores averaged 7 percent to 10 percent.

If the overall number is 7%-10% and State Street is worthy of particular mention, the sales drop there must be awful.